Question

DISCUSS 5 reasons for reconciliation between cost and financial accounting.

Answer 1

The reasons for reconciliation between cost and financial accounting are as below:

1. To identify the variances and reasons of differences in income and cost between both accounting methods.

2. The check the arithmetical accuracy in both set of accounts to ensure that there are no errors.

3. To ensure that cost per unit of products are calculated accurately.

4. To ensure that value of inventory is correctly recorded in both set of accounts.

5. To identify the items which are not considered or accounted in any set of accounts as per standard guidelines.